Ok I have to admit its been some time since I actively tune in to radio but the last 3 weeks I went back to doing that.

It turns out that every day I keep hearing on Class 95 marketing tie ups between Mediacorp and various condominium projects. I wonder whether this is something recent or have been going on for some time.

I wonder whether this will work. The government have worked hard to stamp property speculation. My questions:

What is wrong with speculation? As long as its fair and just speculating on demand and supply is ok

Is the 10% and 3% stamp prices a big thing? I honestly am not well versed here.

This should not affect the resale market directly right? Or it means competition on resale flats is going to get heightened?

What will happen if prices REALLY starts falling?

SINGAPORE: The government has imposed an Additional Buyer’s Stamp Duty (ABSD) for private property of between 3 per cent and 10 per cent for Singaporeans, Permanent Residents and foreigners to moderate investment demand for private residential property and promote a more stable and sustainable market. The changes take effect on December 8.

Permanent Residents owning one and buying second and subsequent properties will pay 3 per cent ABSD.

Singaporeans owning two and buying a third and subsequent residential properties will pay 3 per cent Additional Buyer’s Stamp Duty.

The ABSD will be imposed over and above the current Buyer’s Stamp Duty, which are 1 per cent on the first $180,000 of purchase consideration or market value of the property (whichever is higher), 2 per cent on the next $180,000 and 3 per cent for the remainder.

In a joint statement on Wednesday, the Finance and National Development ministries say the government’s objective is to promote a sustainable residential property market where prices move in line with economic fundamentals. They said prices of private residential properties have continued to rise, albeit more slowly in the last two quarters.

Prices are now 13 per cent above the peak in the second quarter of 1996, and 16 per cent above the more recent peak in the second quarter of 2008. They said that even with the current economic uncertainties, the demand for private residential property remains firm.

Given the uncertainty in stock markets and with interest rates remaining low, private property in Singapore continues to attract local and foreign investors. They added that excessive investment demand will make the property cycle more volatile, and thus increase the risks to Singapore’s economy and banking system. The government said the higher ABSD rate for foreign buyers in particular is necessary, in view of the large pool of external liquidity and strong buying interest from abroad, and the relatively small size of the Singapore market. The government said foreign purchases account for 19 per cent of all private residential property purchases in the second half of 2011, up from 7 per cent in the first half of 2009.

For purchases made jointly by two or more parties (eg a Singaporean with a PR, or a PR with a foreigner), the higher applicable ABSD rate will be imposed. For example, if a citizen purchases a property with a foreigner, the ABSD of 10 per cent will apply.

In the case of a joint purchase by Singaporeans, who each already owns properties, the ABSD of 3 per cent will apply as long as one of the purchasers already owns two properties.

Deputy Prime Minister and Minister for Finance Tharman Shanmugaratnam, said: "We have always had open markets and must keep them that way. However, the reality is that investment flows into our property market are now larger than before, and unlikely to recede as long as interest rates remain low.

"The additional buyer’s stamp duty should help cool investment demand, and avoid the prospect of a major, destabilising correction further down the road."

Nicholas Mak, Executive Director of Research and Consultancy at SLP International, said: "It will curb investment demand for private residential properties quite drastically, especially demand from non-resident foreigners. And I think in the next one to two months or so, demand from non-resident foreigners will almost dry-up." Home buyers are mixed in their views.

One Indian foreigner said: "I know there is a stamp duty, but any increase in that will probably take it out of my level where I want to buy."

An Indian who is a Permanent Resident said: "Nowadays, HDB properties are also difficult to buy, because of more conditions. So they have to buy property here. Definitely they’ll keep buying more irrespective of whether the stamp duty is increased or not."

One Singaporean said: "It probably wouldn’t have an effect in the short-term, because the property market prices are still rising, people are still speculating." Minister for National Development Khaw Boon Wan said: "We are ramping up the supply of new Executive Condominium units through the Government Land Sales Programme.

"This will help higher-income Singaporeans own private condominium units in an affordable way, as the sale of new EC units is restricted to Singaporean households only."

Singaporean first-time buyers and upgraders, and buyers of HDB flats will not be affected by the new measure.

Certain reliefs will be provided so that the measure will not impact home occupation demand by residents.

For example, relief will be provided for Singaporean-foreigner/PR married couples buying their homes.

Reliefs will also be provided for qualifying developers and for purchases falling within the scope of Singapore’s international trade agreements. The government will continue to ensure an adequate supply of private housing to meet-medium term demand.

There are 41,000 unsold private housing units in the pipeline.

The government will inject sites that can potentially yield a total of 14,100 units in the 1H2012 Government Land Sales (GLS) Programme, similar to the supply in previous GLS programmes.

Of these, about 7,000 units will be from sites on the Confirmed List. These numbers take into account the ample pipeline supply and the dampening effect of the ABSD.

The government will also expand the supply of executive condominiums (ECs) in 2012 and is prepared to release sites that can potentially yield 5,000 EC units for the entire year.

Sites for 3,500 EC units will be made available in 1H2012, including 3,000 EC units on the Confirmed List.

The Confirmed List quantum is comparable to the 3,000 EC units from five sites sold for the whole of 2011. More details will be provided in the press release for the 1H2012 GLS Programme on MND’s website.

The Government will continue to monitor the property market and adjust its property policies in step with changes in the market and the economy.

I’m bringing you this article that caught my attention on the business times. Certainly for dividend investors the opportunity in REITs have been getting good these few months with some REIT having yields up to 9-10%.

While searching for top yielders are important, it is worthwhile to choose based on growth prospects and value prospects as well.

Personally i would rather hold down a REIT if it is a growth story but irrationally beaten down, rather than an outright high yielder. You might stand to earn more from the attention the market gives it and the capital appreciation rather than a high yielder that gives the same yield that stagnates.

Yields are attractive but they are subject to movements in cyclical property market

(SINGAPORE) High yields and strong results are making real estate investment trusts (Reits) stand out in a volatile market. But there is debate over their potential as defensive plays, with some market watchers cautioning that Reits are not necessarily safer bets because of their link to the cyclical property sector.

Most Reits turned in impressive results for the quarter ended June 30, 2008. The 18 which reported their performance before last Friday all achieved higher distributable income and distribution per unit (DPU) over the same period last year.

Distribution yields reported by the Reits, based on annualised DPUs and last Friday’s closing prices, ranged from 4.8 per cent to 11 per cent. Reits which offered yields above 10 per cent included MapleTree Logistics Trust, healthcare-related First Reit and Lippo- MapleTree Indonesia Retail Trust.

Overall, the Reits had an average distribution yield of around 7.8 per cent, offering a spread of over 4.6 percentage points above the 10-year Singapore government bond yield of 3.14 per cent on Friday. Compared with one-year fixed deposit rates which start from around 0.8 per cent, the Reits offered an even wider spread.

Analysts say Reits have largely performed in line with expectations. Their good performances have won them fans – with many trading at discounts to net asset values and thus offering relatively high yields, OCBC Investment Research said in a recent report that investors could ‘take a fresh look at S-Reits as defensive vehicles offering stable cash flows and high yields’.

However, others pointed out that Reits still may not match up to traditional defensive plays, including high-yielding blue chips like telcos and banks. While Reits do offer high distribution yields, the sector is influenced by movements in the property market, which tends to be more cyclical compared with, for instance, the telecommunications industry, or even banking, they say.

Distribution yields are also a function of Reits’ unit prices, so yields may look high simply because unit prices have dropped, explained one analyst. Considering both capital gains and distributions to investors, Reits have not done as well compared to around a year ago, he added. The FTSE ST Reit Index has fallen by more than 10 per cent since it was launched on Jan 10 this year.

Reit fans, on the other hand, argue that few sectors are completely resistant to economic slowdowns. Also, some Reits may be more resilient because they can lock in leases over several years, which helps stabilise earnings.

Where there is agreement among most of the market watchers BT spoke to is that Reits will continue to generate steady operating results. For those which have locked in leases or are able to gain from higher rental reversions on lease renewal, ‘there is a lot of predictability in terms of their earnings and distributions,’ said Daiwa Institute of Research analyst David Lum.

With credit conditions staying tough, however, much of the earnings growth will have to come organically. Reits may still acquire properties but they will have to be more selective, analysts say.

Analysts’ top Reit picks include Suntec Reit. ‘With 32.6 per cent of total office net lettable area up for renewal in FY09, we believe Suntec is well-positioned for rental reversion with current $14 psf signing rents versus passing rent of around $6.30 psf,’ said a Citi Investment Research report last week.

CapitaCommercial Trust was another popular choice. Goldman Sachs reiterated its ‘buy’ call on the Reit, favouring its strong organic growth and ‘leadership among office Reits’.